Steve Taylor: Well, I mean demand continues strong. It’s not just us. I mean the whole gas compression rental industry is doing pretty well. You just listened to calls of other public companies in the gas compression space to tell that. So the market continues strong. Some people even talking into 2025, and that’s primarily just because equipment levers have stretched. They were into the 6% to 9% and 9% to 12%. And now generally, you’re probably talking 12-plus months. You have to get equipment. So necessarily, you’re talking into the end of next year and on into 2025. So we see it as strong. We think it will be a good year also. And I want to point out the $50 million increase in our accordion, I mean a lot of money, but it pales a little when you had $175 million already drawn and committed.
But with these deliveries, we’re essentially talking about a second half of ’24. If you order equipment today, it’s about when you’re going to get it. So right now, our view of the capital budget for ’24 in the second half or we do, as you just talked about with the — we’ve got equipment coming out in Q1 and Q2 they’ll continue to be placed and generate rentals. So we’re talking to customers essentially about the second half of the year. So we’re pretty close to that beginning of 2025 also. So we think the demand is there. We’ve been talking to our customers and they say it is. So as soon as we have more competitive news for you on the quarter program for ’24 we’ll put it out. But yes, we’re pretty confident of demand.
Rob Brown: Okay. Great. And just to clarify on guidance and you kind of don’t want questions on guidance after just giving it. But did that guidance include — I think you said it did not include sort of the ’24 capital plan in those numbers that would be sort of on the current capital plan and not much incremental capital. Is that right?
Steve Taylor: Yes, the numbers for ’24 are pretty close to a static model. And again, just like I’ve mentioned, even ordering stuff today, this is November, I mean we’re into that Q4. So once we get the customer requirements and do all the stuff you’re end of the year, maybe a little sooner in Q4, depending on what we can do and the sizes we’re buying. But yes, that number does not include any incremental capital into it other than what’s bleeding over from ’24 and you can tell from the guidance, that’s still going to be a pretty strong year even with that incremental capital going in there.
Rob Brown: Okay. Great. And then last question on margins. You had a little margin compression this quarter. You said it should return. But is that any onetime stuff or just sort of the natural in and out of the business?
Steve Taylor: No, nothing in particular. It just had some high expenses in the quarter. Sometimes you get that, sometimes you get lower expenses, sometimes get high. There’s no rhyme reason to us some time. So nothing extraordinary, but we do think we’ll see a back on the trend we want with you all I don’t want to state my makeup too far, but probably 200 or 300 basis point improvement in rental margins, I think, in Q4.
Rob Brown: All right. Thank you.
Steve Taylor: Thank you, Rob.
Operator: Thank you very much Mr. Brown. [Operator Instructions] We have Mr. Tim O’Toole with the TETRA Capital. Go ahead, please.
Tim O’Toole: Good morning, Steve. How’re you?
Steve Taylor: Hi Tim. Good. You?
Tim O’Toole: I’m well. I was kind of trying to decide what quick to use this morning but, it seems like you’ve accomplished an awful lot in your retirement, maybe as much as you did in the prior 10 years running the company. Congratulations.
Steve Taylor: Well, I don’t know if that’s a compliment or not, is it?
Tim O’Toole: Well, I know. It sounds a little left handed. I’m sorry. I just muted it as a compliment, though. Sorry.
Steve Taylor: Sorry. Backhanded one, but I’ll take it
Tim O’Toole: All right. yes, a little left muted. Sorry about that. So a couple of things that I’m kind of curious about, I’m not sure if you can slice and dice it this way, but if you look at your, what you consider large horsepower fleet, I’m trying to get some sense of what the age of that part of the fleet is because I think the kind of the book value, the depreciated value, let’s say, of stuff that’s older than that and smaller than that is probably close to nothing. It’s probably not quite nothing yet. But it also seems to me that you have spent a few hundred million dollars of cash flow over, let’s say, the years prior to ’23 and then you spent another $150 million. So on large horsepower, very much in demand equipment, so we seem to me that your fleet age for the larger horsepower stuff, the stuff that’s so much in demand would be relatively young. Do you have an assessment of that even if it’s a rough thumbnail?
